Global energy markets are preparing for a major disruption after Iran announced it has closed the Strait of Hormuz “until further notice". The closure of this vital shipping route—where a huge portion of the world’s oil passes every day—follows a sharp increase in fighting. Iran has launched widespread missile and drone attacks against cargo ships, US military bases, and neighbouring countries in the Gulf.
The dangerous situation escalated rapidly after the United States military targeted about 140 sites inside Iran on Saturday. US Central Command (CENTCOM) said these strikes were a response to an earlier Iranian attack on a commercial cargo ship. The American raids focused on destroying Iran’s missile and drone sites, naval bases, ammunition warehouses, and radar stations along the coast.
Following the air raids, US Defence Secretary Pete Hegseth warned that Iran had made a bad choice and would now “pay” for its actions.
Iran reacted quickly by choking off the region’s most important oil route, causing global oil prices to shoot up immediately. Iran’s Revolutionary Guards stated they fired “warning shots” at a ship for ignoring route instructions. However, the US military reported that the ship was actually disabled after its engine room caught fire.
The Revolutionary Guards also announced they hit a second cargo ship in the area. Indian officials confirmed that ten of their citizens were rescued from a lifeboat after fleeing the damaged ship, but one Indian sailor is still missing off the coast of Oman.
The conflict has fast spread across the Middle East, putting neighbouring countries on high alert. The Revolutionary Guards claimed they destroyed US Navy support centres and aircraft carrier refuelling sites at the port of Duqm in Oman. This attack happened just hours after Oman hosted Iran’s foreign minister to discuss shipping safety, leading Oman to strongly condemn the strike.
At the same time, Iran targeted a US base in Qatar, where local officials said three people were hurt by falling missile debris. Air raid sirens sounded in Bahrain, and the United Arab Emirates and Kuwait used their air defence systems to shoot down incoming drones and missiles. Jordan also reported that three Iranian missiles landed inside its borders, though no one was injured.
With the region close to a wider war, neighbouring countries are calling for calm. Pakistan’s foreign ministry said its top diplomat phoned Iran’s foreign minister to urge both sides to stop the fighting and show restraint.
Despite these peace efforts, the situation remains highly dangerous. The root of the current violence goes back to 28 February, when the previous Iranian leader was killed on the first day of the war. In his first written statement since taking power, Iran’s new supreme leader, Mojtaba Khamenei, promised that his country would get revenge, calling it the “will of our nation". With the vital oil route now blocked and both sides refusing to back down, the global energy sector is facing a nervous and uncertain future.
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